The EU Economic Affairs Commissioner, Mr Pedro Solbes, has ruled out any cut in EU funds to Ireland as a result of Monday's reprimand over December's Budget.
Addressing the European Parliament in Strasbourg, Mr Solbes sought to lower the temperature of the dispute between Brussels and Dublin and rejected a call for cohesion funds to be frozen. "We are not talking about a problem of regional policy," he said.
Mr Solbes's remarks followed a statement by the Belgian Finance Minister, Mr Didier Reynders, suggesting that EU finance ministers were concerned that Ireland was using EU aid to fund a low tax regime.
"Is it logical for a country like Ireland to give favourable tax breaks to industry while benefiting from aid from the European Union? If aid permits a region or a country to catch up to EU levels, people wonder if it is being abused when they see taxes or other charges being lowered. The question arises over whether things have not gone too far and limits must be set," he said.
The Commissioner defended the EU finance ministers' "formal recommendation" against Ireland as a necessary step after Dublin ignored warnings about the economy for three years. And he insisted that the issue was not whether the Irish economy was performing well but whether the Government was fulfilling its promises to EU partners.
"We are not judging Ireland compared to anyone else. We are judging Ireland compared to its own commitments," he said.
Most MEPs who spoke during the debate were critical of the action against Ireland and some accused the Commission of arrogance in targeting one of the EU's smallest member-states for the first rebuke of this kind. The Fianna Fail MEP, Mr Brian Crowley, reminded the Commission that the Irish people made great sacrifices to guarantee that economic growth could take place.
Fine Gael's Ms Avril Doyle said that the reprimand would fuel anti-European feeling in Ireland in advance of the referendum on the Nice Treaty, which is expected in May. For the Greens, Ms Nuala Ahern predicted that the treaty would be resoundingly rejected and urged the Government to ignore the reprimand.
The Labour MEP, Mr Proinsias De Rossa, was the only Irish MEP to support the reprimand. He accused the Government of recklessness and warned that its defiant response to Monday's action would feed xenophobia and anti-European sentiments in Ireland.
